Displaying items by tag: Russia

Russia: BASF Construction Systems plans to spend at least Euro6m towards building a new cement additive and concrete admixture plant. The plant will be the company’s fifth in the country, according to Interfax. The subsidiary of Germany’s BASF is currently looking for a site for the unit with a decision planned for 2018. It will then build the plant by 2021.

China: Anhui Conch’s sales revenue grew by 35% year-on-year to US$11.9bn in 2017 from US$8.85bn in 2016. Its net profit nearly doubled to US$2.51bn from US$1.36bn. The cement producer said that it had, ‘seized the favourable opportunities arising from the state’s further deepening of supply-side structural reform and the promotion of off-peak season production.’

During the year Anhui Conch opened eight cement grinding plants including Quanjiao Conch Cement, Anhui Xuancheng Conch Cement and Nantong Conch Cement. Outside of China the company completed phase two of its Merak grinding plant in Indonesia and started cement production and completed construction of the North Sulawesi Conch plant in Indonesia and the Battambang Conch plant in Cambodia. The units in Indonesia and Cambodia are due to start production in 2018. A new plant, Luang Prabang Conch, is being built in Laos and preliminary work on projects at Volga Conch in Russia, Vientiane in Laos and Mandalay in Myanmar is underway. At the end of 2017 Anhui Conch says it has a clinker and cement production capacity of 246t/yr and 335Mt/yr respectively.

The cement producer also announced that its Baimashan Cement plant was intending to start operating a CO₂ collection and purification pilot project in the first half of 2018. The initiative is part of the group’s moves to implement the government’s low-carbon development strategy.

Russia: China CAMC Engineering is seeking international finance for an upgrade to the Zhiguli cement plant. The US$70m project was part of a wider US$175m contract with Eurocement signed in mid-2014 to upgrade three plants, according to Inside International Industrials. The building phase of the project is planned to last 36 months. The other plants in the project are the Pikalevo cement plant and the Savinski cement plant. China CAMC Engineering a subsidiary of China National Machinery Industry Corporation (Sinomach).

Russia: AlfiGroup has revived a cement plant in Dorogobuzh, Smolensk region that was closed a decade ago. The relaunch is scheduled for March 2018, according to the Beton Russia news website. The company has spent Euro6.3m on the reopening. The plant will produce up to 0.3Mt/yr of clinker by the third quarter of 2018 and production will be developed until 2020. Around 200 jobs will be created.

Russia: Tattsement plans to complete the construction of its new cement plant in the Alabuga special economic zone in the Republic of Tatarstan before the end of 2018. The 0.6Mt/yr unit will produce nanomodified cement, according to Nezavisimy Stroitelny. Drying machines and a mill have been purchased for the project.

Russia: Eurocement Group plans to spend Euro31m on upgrade work at two cement plants in the Leningrad region. It will allocate Euro14m towards work at Pikalyovskiy Cement and Euro17m at Peterburgcement, according to the Delovoy Peterburg newspaper. New milling equipment with additional filter will be installed at Pikalyovskiy Cement, and one of the plant’s two mills will be closed. This will allow the enterprise to raise the output of premium cement, decrease its production cost, and reduce emissions. A gas-piston thermal power with a capacity of 24.9MW will be built at the Peterburgcement plant.

Russia: Siberian Cement reduced its cement production by 3% year-on-year to 3.1Mt 2017. Production at its subsidiary Topkinsky Cement fell by 4% to 2.06Mt and at Krasnoyarsk Cement by 10% to 0.65Mt, according the Kommersant newspaper. Production at its Timluysky cement plant rose by 26% to 0.34Mt. Siberian Cement’s vice-president Gennady Rasskazov forecast that demand for its products will remain similar to 2017 in 2018. However, demand is anticipated to fall in some regions of the Siberian Federal District.

Russia: Arpad Farkas has been appointed general director of Lipetskcement, part of the Eurocement Group. Farkas previously ran a cement plant for Lafarge.

Russia: Karel Okleshtek has been appointed the new general director of the Mordovcement plant (included in Eurocement Group). Previously, he headed a plant of the international group HeidelbergCement.

Eurocement owner Filaret Galchev has been surprisingly candid on Russian television this week commenting on why his company offloaded shares in LafargeHolcim in February 2016. He described the move as ‘unexpected’ and a reaction to the shares losing nearly half their value in six months.

Eurocement ran a repurchase deal for the stake with Sberbank in late January 2016 before the bank sold it in early February 2016. Galchev’s wallet wasn’t the only casualty of LafargeHolcim’s falling share price. Board chairman Wolfgang Reitzle announced his plans to resign from the company at about the same time. LafargeHolcim’s share price has since rallied somewhat although it remains well below the level it commanded in the summer of 2015 following the merger.

Back on Russia, Galchev also continued Eurocement’s theme of predicting doom and gloom for the domestic cement industry. He forecast a further drop of up to 10% in local demand for cement. This is in line with previous comments Eurocement has made since at least about mid-2015. Although on the plus side the steepness of the fall in demand may be softening at least.

Graph 1 – Cement production in Russia, 2011 – 2015.

As the data above from the Russian Federal State Statistics Service (ROSSTAT) shows, cement production in Russia fell by 9% year-on-year to 62.1Mt in 2015 from 68.5Mt. This follows years of growth. Data for the first four months of 2016 seemed to show an acceleration of this trend with an 18% drop in production to 8.9Mt for the first three months of the year. However, the latest released figures, for April 2016, show that production may be picking up somewhat. We won’t get a better idea until the middle of the year. On the supply side, ROSSTAT doesn’t release any figures on cement consumption but the Russian railways were have reported that their cement volumes to consumers were down by 9.2% to 4.8Mt in the first quarter of 2016. This is a percentage drop close to what Filaret Galchev has been suggesting for 2016 as a whole.

The news from the multinationals supports this picture. LafargeHolcim reported weak construction markets in the first quarter of 2016 following sharp declines in 2015. HeidelbergCement recorded ‘slight’ decreases in its sales volumes in the period. It also noted a knock-on effect in Sweden due to lowering export deliveries to Russia.

All in all it’s a similar picture to fellow BRIC country Brazil, which we covered last week, with falling commodity prices hammering the economy and the local industry battening down the hatches. However, international oil prices are slowly creeping up and the International Monetary Fund (IMF) has predicted lower decreases in its economic output in 2016. Perhaps Filaret Galchev will have some good news to talk about on Russian television sooner than he thinks.